Closing Bell 30th November: ASX Edges Up Amid Bank Gains and Origin Energy’s Takeover Rejection

Gold edges closer to a record high

Gold is nearing its all-time high as investors anticipate the Federal Reserve will reduce interest rates next year. This expectation stems from a prediction of a tough economic downturn and significant Fed policy easing. Speculators in the U.S. Treasury market are now the most bullish since 1991. Following comments from Fed officials suggesting steady rates, bond yields are falling. Gold’s price rise, over 11% since early October, is buoyed by safe-haven buying and declining global bond yields, approaching its pandemic peak. Economic data showing U.S. growth and consumer spending trends are also influencing gold prices.

Inflation is cooling in Europe

Inflation in Europe shows signs of easing, with Germany and Spain reporting unexpected drops in price pressures, indicating possible European Central Bank rate cuts by April. Germany’s inflation slowed due to lower energy and travel costs, while Spain saw a decrease in fuel and tourism costs. RBC Capital Markets forecasts a slower inflation cool down and rate cuts than the market expects, predicting the ECB to maintain rates through 2024. They anticipate short-term growth challenges in the euro area and expect energy inflation to rise again next year, influencing overall inflation rates.

Origin drops 3pc after board rejects ‘plan B’ bid 

Origin Energy declined a ‘plan B’ proposal from Canada’s Brookfield and EIG to acquire the company. The board deemed the offer not in the shareholders’ best interest, citing its complexity, conditionality, and uncertainty. The proposal involved selling the Energy Markets business to Brookfield and a takeover bid by EIG for Origin’s shares, contingent on various conditions and approvals. Origin’s shares dropped by 2.9% following the announcement. The ongoing takeover discussion, valuing Origin at about $20 billion, has been postponed until December 4.